Don’t get me wrong, I’m a strong supporter of public schools. Our son went to Grant, JAMS and Samohi and had a great experience. What I don’t like is the feigning of fiscal distress to put an additional tax burden on the financially struggling residents of Santa Monica through another parcel tax. Residents are already supporting Santa Monica Malibu School District (SMMUSD) to a great extent though property and sales taxes. SMMUSD’s operating budget and reserves are in great shape.
Because of the proposed $495 parcel tax measure, I’ve been looking at SMMUSD’s finances though the budget reports and California Department of Education database. I find that the title of the March 21st SMDP article titled “SMMUSD school district maintains positive financial outlook despite growing deficit” to be deceiving. The school district does not truly have a “growing deficit” or ongoing structural deficit.
In the past 5 years, the initial adopted budget projected a deficit (revenues less expenditures) in 3 of the years but never had a deficit and averaged $14M per year surplus, $9M if the $28M of pandemic one time funding is not included. Yet they are again predicting deficits the next 3 years.
For the last 2 years, the 2023-24 initial budget had a $6M deficit predicted and ended up with a $23M surplus. For 2024-2025, the initial budget had a $11M deficit predicted and ended up with a $10M surplus. That is why I don’t trust their recent numbers saying that there will be a $9.5M deficit this year caused in part by the decision to retain about 10 positions.
It's my belief that SMMUSD does this to hide their true financial position so that they can say they need more money. It provides the argument that if the proposed ballot measure to replace $12M funding from the City (which hasn’t been confirmed that they won’t get this money starting in 2027-28) doesn't pass, teachers and staff will be fired.
Over the last 10 years: enrollment decreased 23% from 11,249 to 8623 (Census Day Enrollment), revenues increased 53% from $147M to $225M, reserves increased 220% from $38M to $84M, staffing has remained level at 1280 (plus or minus 4%), the percentage of staff that are teachers decreased from 45% to 39% (572 to 494) and non-teacher staff increased by 10% (703 to 768).
The fear mongering statement that “pandemic-era relief funds and other one-time resources that helped stabilize school budgets in recent years have now expired, forcing the district to align pre-pandemic revenue levels with ongoing expenses” is false. Base funding increased $35M from $96M to $131M. SMMUSD is receiving an extra $19M per year (from $35M in 2018-19 (pre-pandemic) to $54M in 2024-2025) from Local Funding that is not relief or one time funding. This is from an existing parcel tax of $530, 0.5% sales tax revenues, Measure GS property transfer fees. and the Joint Use payment from the City. That’s $51M more per year of on-going funding while enrollment decreased 19%.
The reserves number of $52M noted in the article does not include the $21M in reserves in the restricted funds account. As of June 30, 2025 the total reserves were $84M. This is $40M over the Financial Oversight Committee’s recommendation and $62M over the state’s reserve cap level if SMMUSD was not a Basic Aid district. The state doesn’t want school districts sitting on piles of cash like what SMMUSD has.
SMMUSD property taxes increased significantly ($449 for a $1M condo) this year from the issuance of $200M in bonds for school construction projects, with an additional increase coming when the remaining $295M of measure QS bonds are issued. There is already a parcel tax that was $530 which, like the proposed parcel tax of $495, increases with the CPI and lasts forever. The 2025 tax bill for SMMUSD for a $1M condo was $1711 on top of the base of $10,000 with potentially another $495 parcel tax and $500 bond payment coming.
Parcel taxes are regressive taxes that put a disproportional burden on lower-income residents. A condominium pays the same as a large business park.
Renters are affected too as SMMUSD taxes can be passed through.
Housing affordability in Santa Monica is an issue with over 20% of homeowners and renters paying more than 50% of their income on housing. Residents are dealing with inflation and job instability. This new parcel tax affects housing affordability. Housing affordability affects SMMUSD enrollment. This new tax will literally take food off the table of some residents including SMMUSD students. That is not right.
SMMUSD operating finances are in great shape, much better than many of Santa Monica residents.
No new parcel tax.
Karen Melick
Santa Monica